SINGAPORE'S factory production delivered another impressive showing for the month of October, shrugging off a steep decline in biomedical output as electronics continued to power ahead.

But economists say that while manufacturing growth is still expected to continue, the pace is likely to ease in the fourth quarter and into 2018, as a result of less favourable base effects and slowing semiconductor demand.

The Economic Development Board on Friday reported that overall manufacturing output grew 14.6 per cent in October, slightly missing economists' estimates of 16 per cent, due mainly to the downside surprise of the traditionally volatile biomedical sector.

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If the biomedical cluster were to be excluded, manufacturing growth would have been 25.8 per cent.

On a seasonally adjusted month-on-month basis, factory output went up by 0.7 per cent in October. With biomedical stripped out, output grew 6.8 per cent.

Manufacturing, which makes up a fifth of the Singapore economy, has been a key growth driver this year.

All clusters expanded in October, with the exceptions of biomedical and transport engineering. Biomedical plunged 24.2 per cent compared to a year ago, on the back of a 36.1 per cent fall in pharmaceuticals.

Transport engineering remained the weak link, declining 3.8 per cent due to weakness in the land transport and marine & offshore engineering segments.

But star performer electronics more than made up for this shortfall, surging ahead with a stellar 45.1 per cent growth. This was led by semiconductors, which posted gains of 64.6 per cent - its 20th consecutive month of double-digit expansion.

Precision engineering, a beneficiary of the rise in global electronics demand, grew 23.6 per cent year on year, up from 17.1 per cent in September.

Both the chemicals and general manufacturing clusters also turned in strong report cards, registering growth in the double digits.

General manufacturing, in particular, shot up from 4 per cent in September to 15.5 per cent last month, supported by a 42.3 per cent surge in the food, beverages & tobacco segments.

The data comes a day after the Ministry of Trade and Industry upgraded its forecast for Singapore's 2017 economic growth to 3 to 3.5 per cent, up from 2 to 3 per cent previously. This came from a brighter external outlook and improved demand for electronics, which boosted overall growth.

But despite the slew of good news, economists are not overly optimistic about the continued momentum for semiconductors.

UOB economist Ho Woei Chen noted that the growth in semiconductors this year has been mostly cyclical, and expects this demand to slow next year.

"That slowdown may also mean headwinds to other surrounding services such as precision engineering," he added.

Factory output growth is also expected to moderate towards the tail end of this year, due to high base effects kicking in.

The Ministry of Trade & Industry had also warned that China's growth next year is expected to moderate due to a slowdown in investment - a sentiment shared by other economists.

However, most industry watchers are not too worried about the easing of manufacturing growth. As Credit Suisse economist Michael Wan put it, factory output for next year is expected to go "from great to good".

He foresees the pace of expansion slowing to a more sustainable single-digit growth, albeit on the higher side. Services, which constitutes two-thirds of the economy, is expected to help with some of the heavy lifting in economic growth.

"This year, growth has been very narrowly based in electronics. For 2018, we believe the drivers of growth would broaden to other domestic-oriented sectors," he said.